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In November 2015, BLOGGER CYPRIAN NYAKUNDI (Corporate Fraud Assassin) reported that National Bank of Kenya had developed the habit of cooking books of accounts (Nyakundi 2015). The habit has refused to go away and instead, they now do it with utmost arrogance not caring what the public would say and of course with the backing from Opus Dei. As we said before, we can only compare Wilfred Musau and Hassan Mohamed to a cat which after stealing milk, leaks its whispers with impunity not bothered about the opinion of the milk owner.


We promised to procure the services of our BONOKO (street) ACCOUNTANT just to understand (in a nutshell) to what extent WILFRED MUSAU is MISLEADING INVESTORS through CREATIVE ACCOUNTING. We have the draft verdict and the Bonoko Accountant is making sense. Below is an excerpt of NBK Published accounts for the period ending 30th September 2017. What follows is a BLOW-BY-BLOW ANALYSIS on the cooked accounts.


National Banks’s Cooked Books of Accounts


1.) Referring directly to the Central Bank Guidelines (CBK Guidelines), Loans are classified from Grade 1 to Grade 5. Provisioning is an Accounting treatment which applies to bad debts beyond recovery.

The term “Statutory Reserves” as captured on Line 16 of the image above is only applicable to Grades 1 and 2. Grade 1 accounts are deemed to be operating normally and attracts Loan Loss provision of 1% while Grade 2 are classified as Watch accounts and attracts additional 2% on provisions. In total, Statutory Loan Loss Reserves is a one-off 3% provision of the loan portfolio. It is one-off because it’s only levied once in the life of a loan.

Now here is the KITCHEN-WORK. For such reserves to increase by KSH 1 Billion as seen in Line 16, Loan Portfolio ought to have grown by at least KSH 33 Billion.

According to Line 5 of the above image, Loans and advances ought to have been at least KSH 95 Billion if the reported Statutory Reserves amount was anything to go by. However what we are seeing is a reduction of the loan portfolio from KSH 62 Billion to KSH 57 Billion. A reduction in the portfolio by KSH 5 Billion should have invoked a write-back of about KSH 150 Million back to the P&L.

Because there was no growth of Loan portfolio, The KSH 1 Billion HIDDEN under Statutory reserves is an actual loan loss which ought to have been captured on the Profit and loss account. If you adjust this hidden loss amount to NBK September accounts, you will increase the comprehensive loss position from KSH 6.164 Million to a staggering loss of KSH 935 Million.

Now tell me, why is Wilfred Musau misleading Investors? Why is CBK Governor allowing this to happen? Patrick Njoroge (Celebrated CBK Governor) boasts of having worked with IMF, what was he doing there if he cannot even comprehend simple accounting treatments? Was he a sweeper or a Chaplain at the IMF Offices?


2.) In June 2017, NSSF injected KSH 3 Billion (NSSF Bails out NBK) to National bank as a loan which should have been captured as a liability even if it was a non-interest earning instrument. However, out of their own wisdom or lack of it, Wilfred Musau & Hassan Mohamed decided not to capture this anywhere. Shockingly, there is an entry for borrowed funds captured as NIL on Line 11 of the image above.

The Impact of these funds on the loan portfolio is also not evident as the portfolio shrunk. Therefore any opinion suggesting that the funds were offloaded to customers must be resisted.

In short, Wilfred Musau & Hassan Mohammed (the protected criminals) may have once again SPIRITED AWAY with NHIF bailout, Just like RUTO did to Mumias Sugar. This time around, they have a new Chief-chef in town called Peter Kioko as the Chief Finance Officer.

Peter Kioko, a longtime friend of Wilfred Musau was frog-matched from the Fast Moving Consumer Goods (FMCG) Industry to come and implement creative accounting in National Bank. He has over 20 years of experience in creative accounting in the FMCG sector with the last callous experience being in EABL. He goes around Nairobi CBD boasting of how no company can make a loss as long as he is the CFO.

                       Peter Kioko: King of Creative Accounting


3.) Retained Earnings is simply profit retained and for a company that has been around for more than a year, it’s a cumulative figure of profits unpaid as dividends. As a result, if a company makes profit, the figure goes up in the following reporting period. Inversly, when losses are encountered, the figure goes down and eats up on the core capital (Tier 1 capital) of the institution.

From Line 15 of the above image, you will notice that as of 30th September 2016, Retained Earnings were KSH. 3.2 Billion followed by a KSH 3.06 Billion in June 2017.

We are all aware National Bank has not declared a loss which leaves all intelligent people wondering how the figure suddenly shrunk to KSH 1.8 Billion. Could there be a hidden loss somewhere? Why are these two criminals (Wilfred Musau & Hassan Mohamed) testing the investor intelligence? Where is CBK and CMA who must give a go-ahead before accounts are published?

At least we know Audit firms send inexperienced associates to deal with hardcore criminals like Hassan Mohamed & Wilfred Musau who in turn outmaneuvers them on Banking matters. But a regulator like CBK must have qualified idiots to do the job rather than having an Opus Dei like Patrick Njoroge, who continuously apply make-up and rushes to his one bedroom apartment every evening at 4pm.


4.) Paid up share capital is known as Tier 1 capital in the financial sector. It’s against this figure that many relevant banking ratios are derived to determine the FINANCIAL SOUNDNESS of a banking institution. Some of the Ratios are: Capital Adequacy Ratios, Earnings Ratios, Bad Loan ratios, employee productivity ratios best captured on overheads and liquidity ratios just to mention but a few.

Rogue Banks like National Bank Will CARESS the source numbers that affect these ratios because according to them, FINANCIAL SOUNDNESS MUST BE FORCED ON INVESTORS. If Wilfred Musau together with his creative accountant (Peter Kioko) correctly declared the 1 Billion loss, they would have been UNDER WATER on all the FINANCIAL SOUNDNESS RATIOS.

Looking at Line 13 of the above image, you will realize core capital increased from KSH 7.21 Billion to KSH 7.37 Billion without disclosure of activities which EXCITED this movement. We already know how the Rights Issues was squandered by Wilfred Musau and Hassan Mohamed (NBK Rights Issue Scam) and as a result never took place.

So where is the additional paid up capital coming from? Could it be a balancing figure for accounts that refused to balance? Or was it meant to reduce the SEVERITY OF NON-COMPLIANCE with some CBK ratios? Already we can see Core Capital as a ratio of Risk Weighted Assets is UNDER WATER by 0.7% while the Total Capital (Tier 2 capital) ratio is submerged by 3.2%.

The misreporting of this figure was engineered by the Chief crooks (Wilfred Musau & Hassan Mohammed) with direct supervision from CELIBACY EXPERT PATRICK NJOROGE, THE GITHERI MEDIA SENSATION. 



When a company employs incompetent crooks like Hassan Mohamed and the entire group of Munir Remnants, they survive on excuses and deception meant to satisfy their greed and deepen their pockets. A few pointers are captured next:

1.) Line 17 (Other Reserves) and Line 24 (Fair Value Changes in Financial Assets) in the above image seems to be affected by similar events evidenced by their trend. We accept correction from fellow Bonoko Accountants.

National bank has a website (NBK Investor Relations) and being a publicly listed company, they are obliged to make public there accounts whether cooked or not. There only hope is that the consumers of such information are not sophisticated enough to digest the fine-print.

From the financial accounts in there website, you will notice that the events leading to losses on these financial instruments have been consistent for a few years. This begs the question: “Why continue holding on financial instruments whose value depreciates every year?”. It is almost guaranteed the same instruments will depreciate next year. Now if you did not know, this is the DEFINITION OF INCOMPETENCE.


2.) In the face of Rate capping and a Broke government, Government securities stood out as best sources of high-yielding investment. On Line 2 & 3, you will notice National Bank Assets continued to shrink (on CBK and Government securities), reminiscent of a company approaching foreclosure and certainly an investment cheat-sheet.

Then a surprise figure (Line 4) designed to balance runaway unexplained liabilities shows up as Government instruments available for sale at KSH 18 Billion from a ZERO amount in 2016. It must be a PLEASANT COINCIDENCE that investment instruments were designed to suddenly mature without notice.

Could it be that National Bank does not have a Treasury department to monitor maturity of investment instruments with plans of quick re-investment? I refuse to believe this Bullshit argument. The Creative CFO (Peter Kioko) found it easy to introduce a balancing figure against treasury instruments because Audit Firms lack the experience to understand treasury instruments and rightfully so because they lay emphasis on theories while banking criminals concentrate on understanding the operationalization.


3.) National bank is on record having sold most of its assets where Wilfred Musau (Current MD), Sheikh Munir (Former MD) and Hassan Mohamed (Duale’s Money Laundering PESALINK) single-handedly assumed ownership of those properties through proxies. We are informed the Trio pushed the sale of these assets to there proxies at the BOOK VALUES rather than the FAIR MARKET VALUES. For instance, a branch which was valued at KSH 50 Million 10 years ago was sold at that price (50M) with total disregard to the actual market value of say KSH 180 Million

The Ignorant shareholders then continue wondering why the much hyped sale of assets failed to achieve its objective of shoring up core capital. Off course the Githeri Media sensation (CBK’s Beauty Pageant Patrick Njoroge) as a partner in shoddy transactions with most banks (including KCB’s Oigara) is not a dependable watch-dog for shareholders. Shareholders must however be informed that Foolishness can never be forgiven even by God.

Having sold most of its assets, National bank was left with more permanent assets whose Expected life (Leases) are longer with minimal depreciation.

It is therefore shocking that National bank properties EXPERIENCED ACCELERATED DEPRECIATION within one year. You will notice on Line 6 of the image that properties’ book value CONDENSED by KSH 700 Million which is weird for assets having long Expected lives (Leases). Inversely on Line 21, the cumulative depreciation for the year quoted as KSH 369 Million did not match the movement in book values.

Wilfred Musau must have noted that correct entry of the depreciation figure could have plunged his books of accounts to a further loss. You know he must demonstrate Financial soundness to unsuspecting shareholders. By the way, all Pension contributors (NSSF) are shareholders of National Bank. One of these fine days there will be VIOLENT DEMONSTRATIONS across the country against National Bank Looters.


4.) Intangible assets in a bank are mainly the Software. Core Banking System forms the biggest part of this item. Remember we talked about how National Bank criminals LOOTED (NBK System Upgrade Heist) the bank in the PRETEXT OF SYSTEM UPGRADE? We stated with certainty how an upgrade from the same platform did not require Accelerated amortization. Yet as you can see on Line 7 of the above image, KSH 400 Million amortization has been recorded. While Wilfred Musau decided to hide Actual Loan Loss provisions disguising them as statutory reserves, he found it necessary to pass an unnecessary systems amortization entry of KSH 400 Million because according to him, Looting comes first before the Pensioners (shareholders). Wow! Interesting Times indeed!!


5.) According to Line 18 of the image, Interest income from Loans reduced by 51% from KSH 7.6 Billion to KSH 3.7 Billion. While it is much easier to blame the Interest rate capping as a substitute for incompetence, you will notice that the average rate banks were charging before capping was 18% per annum (Average rate in 2015) which reduced to 14% after rate capping. Indeed you will further notice that National Bank charged a weighted average rate of 16.9%.

This meant that if you had a performing loan portfolio of KSH 42 Billion you would earn KSH 7.56 Billion per annum of Gross Interest income as compared to KSH 5.88 Billion after rate capping. The reduction as a result of rate capping would be 22% and anything else like 51% is pure incompetence. Blaming rate capping is simply a convenient way for looters with no institutional growth strategy.

You will notice that reduction of rates was meant to be good for the banks who were constantly complaining about high default rates. Lower rates meant lesser repayment amount by borrowers and hence lesser default rates. As a result, Efficient banks used that as an opportunity to plough back suspended interest (in the suspense account) back to profit and loss account.


6.) Last but not least, looking at Line 23 we see an item named “Other Operating costs“. We are told this item is mainly for marketing. Bernadette Ngara, a woman with a cutting edge appetite for Ben 10s (and we say so because she only employs her boyfriends. In exchange for a good salary, the boys MUST persevere a harsh and ageing environment of cartilages) has over KSH 1.5 Billion of marketing budget annually.

She has a target from Hassan Mohamed & Wilfred Musau to come up with all sorts of marketing tricks just to make sure the KSH 1.5 Billion is exhausted and true to her dubious personality, she does just that.

Bernadette Ngara: The woman with a Killer appetite for young boys



Remember we made some promises in our previous articles? It is not in our nature to forget and rest assured, we will keep all our promises. For instance, Insider loans as captured on Line 26 of the above image is reported as KSH 26 Million. What we know is that more than Half of the Islamic Banking Portfolio are loans belonging to the Criminal Chairman (Hassan Mohamed) through proxies. Very loud examples are AINUSHAMSI LIMITED and BELLEVIEW PARK LIMITED. However, this is news for another day.


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